HELOC on a Property with Existing Liens

1 Reply

Hey everyone. Is it difficult to get a HELOC on a property with existing liens? My property has (a) water lien(s) on it that's currently being disputed and was hoping to do a HELOC on the property, but worry the lien(s) will be a hurtle.


Lender are required to pay off or settle any lien or judgement on title unless you have a payment agreement and they offer a subordination. Which is sound like in your case it is not going to be subordinated due to dispute. If you need the cash I would advise not doing a HELOC and just doing a cash out refinance. You can always negotiate the pay off or amount owed with the water lien if they realize funds are going to be available. Just as an example lets say you owe or have a lien for $3000.00 I usually advise making an offer of .30% of the value to settle. So based on that number scenario $3000 x .30% you would offer to pay $900.00 to settle.

The bank/lender can also prepare the loan commitment to help settle the debt with the collector and the title company can agree to hold the amount in escrow to help settle and prove paid funds.